Page 39: of Maritime Reporter Magazine (July 2006)

July, 2006 • MarineNews 39

Worldwide SCORE

Climbs Higher

Worldwide oil and gas drilling contrac- tor GlobalSantaFe Corporation reported that the company's worldwide SCORE, or

Summary of Current Offshore Rig Eco- nomics, for May 2006 was up 1.2 percent from the previous month's SCORE.Glob- alSantaFe's SCORE compares the prof- itability of current mobile offshore drilling rig dayrates to the profitability of dayrates at the 1980- 1981 peak of the off- shore drilling cycle. In the 1980-1981 period, when SCORE averaged 100 per- cent, new contract dayrates equaled the sum of daily cash operating costs plus approximately $700 per day per million dollars invested. In addition to a world- wide SCORE covering key types of com- petitive offshore drilling rigs in key drilling markets, a separate SCORE is cal- culated for certain types of rigs and cer- tain regions.

Husky Makes New

Discovery

The Canadian Press reported that

Husky Energy Inc. made a new hydrocar- bon discovery in western section of its

White Rose oilfield located off the shore of Newfoundland. The energy firm said that current data suggests the discovery could contain a potential recoverable resource of 40 to 90 million barrels of oil.

The discovery centers on the O-28 well, which was drilled to depths of up to 3,342 m. An additional side-track well is being drilled to provide further information about reservoir quality, continuity and hydrocarbon contacts, the company added. Additional wells are planned over the next few years. Husky Energy also plans to tie this western extension of the oilfield back to the SeaRose floating pro- duction, storage and off-loading vessel.

The SeaRose vessel is presently pro- ducing approximately 85,000 barrels of oil per day from four production wells.

Plans for a fifth and sixth well will further increase reservoir production capacity to 125,000 barrels of oil per day.

Administration

Urges Oil Lease

Renegotiation

According to a variety of news report, the oil majors are coming under increas- ing pressure from the government to rene- gotiate Gulf of Mexico drilling leases that allow them, by some estimates, to avoid paying as much as $10 billion in goven- ment fees. The Interior Department may ask the companies to voluntarily rewrite contracts from 1998 and 1999 to add a provision for royalty payments when oil and gas prices are high. Price thresholds for relief from royalty fees were acciden- tally omitted in those years and were included in 1996, 1997 and 2000.

Transocean Wins

Contracts

Transocean Inc. said that Hydro has awarded the company a drilling contract for the construction of an enhanced Enter- prise-class drillship plus a multi-year con- tract award for the High-Specification semisubmersible rig Henry Goodrich.

Combined revenues possible from the two contract awards total approximately $950m over six years.

The enhanced Enterprise-class drillship is being designed to include drilling capa- bilities in the offshore drilling industry.

Hydro has awarded the company a four- year drilling contract, which is expected to commence by mid-2009, following shipyard construction, sea trials, mobi- lization to the U.S. Gulf of Mexico and customer acceptance. The contract com- mencement date is contingent on vendor performance and other factors. Revenues of approximately $694m are possible over the four-year contract period, excluding revenues for mobilization, demobilization and client reimbursables.

Construction of the dynamically posi- tioned, double-hull drillship is expected to take place at the Daewoo Shipbuilding and Marine Engineering Co., Ltd. (DSME) yard in Okpo, South Korea, with an estimated total capital expenditure of approximately $615 million, excluding capitalized interest. The rig will feature

Transocean's patented dual-activity drilling technology, allowing for parallel drilling operations designed to save time and money in deepwater well construc- tion, compared with conventional rigs.

The dual-activity technology, along with a new and enhanced top drive system, an expanded high-pressure mud-pump sys- tem and other unique features of the drill- ship target the drilling of wells up to 40,000 feet of total depth. The rig will have a variable deckload of more than 20,000 metric tons and is designed to drill in water depths of up to 12,000 ft. The enhanced Enterprise-Class drillship will be the second unit to be constructed for

Transocean in the DSME yard, following the previously awarded five-year contract from Chevron Corporation for the Dis- coverer Clear Leader. Both units are enhanced versions of the company's three predecessor Enterprise-class drillships, which have set drilling records in recent years, including the water-depth drilling record of 10,011 ft. held by the Discover- er Deep Seas. In addition, Hydro has awarded the semisubmersible rig Henry

Goodrich a two-year contract for drilling operations in the U.S. Gulf of Mexico.

Offshore

Baker Hughes Inc. announced that the U.S. rig count for May 2006 was 1,635 up 38 from the 1,597 counted in April 2006 and up 316 from the 1,319 counted in May 2005.

The Canadian rig count for May 2006 was 240, up 42 from the 198 counted in April 2006 and down seven from the 247 counted in May 2005.

May 2006 Rotary Rig Counts

May 2006 April 2006 May 2005

Land OS Total Var. Land OS Total Land OS Total

United States 1535 100 1635 38 1502 95 1597 1229 90 1319

Canada 237 3 240 42 196 2 198 244 3 247

North America 1772 103 1875 80 1698 97 1795 1473 93 1566

May 2006 April 2006 May 2005

Land OS Total Var. Land OS Total Land OS Total

US 1535 100 1635 38 1502 95 1597 1229 90 1319

Canada 237 3 240 42 196 2 198 244 3 247

Worldwide Total 2417 378 2795 88 2341 366 2707 2068 359 2427

Water Depth Active Approved Applications Active in Meters Leases to Drill Platforms 0 to 200 3,606 41,932 3,871 201 to 400 235 1,252 21 401 to 800 439 857 10 801 to 1000 359 427 6 1000 and Above 3,485 1,202 16

Source: MMS

Most Recent GOM Exploration & Construction Plans

Date Operator Plan Type Block 6/15/2006 BP Exploration & Production Inc. DOCD MC 522 6/14/2006 Newfield Exploration Company DOCD MP 138 6/13/2006 Hydro Gulf of Mexico, L.L.C. DOCD HI 165 6/13/2006 Triangle Oil & Gas, Inc. DOCD SS 253 6/13/2006 Newfield Exploration Company EP WC 593 6/12/2006 Rampant Lion Energy, LLC DOCD MU 758 6/9/2006 Kerr-McGee Oil & Gas Corporation EP GB 342 6/7/2006 ATP Oil & Gas Corporation DOCD MC 711 6/7/2006 BP Exploration & Production Inc. EP MC 778 6/7/2006 Remington Oil and Gas Corporation DOCD VR 61

These are the most recent Gulf of Mexico exploration and construction plans filed with the MMS (Source: www.rigzone.com)

Worldwide Offshore Rig Utilization

Drillships Jackups Semisubs

May 2006 26 34 76.5% 303 319 95.0% 131 140 93.6%

April 2006 28 34 82.4% 298 316 94.3% 132 140 94.3%

March 2006 28 34 82.4% 295 316 93.4% 130 140 92.9%

February 2006 28 34 82.4% 296 316 93.7% 131 140 93.6%

January 2006 27 34 79.4% 290 316 91.8% 131 140 93.6%

December 2005 27 34 79.4% 294 316 93.0% 133 140 95.0% (Source: www.rigzone.com)

Offshore Statistics by Water Depth

Baker Hughes May 2006 Rig Counts

Workover Rig Counts —

May 2006

May Var. April May 2006 2006 2005

United States 1657 88 1569 1336

Canada 526 208 318 466

North America 2183 296 1887 1802

Offshore Statistics by Water Depth

Worldwide Offshore Rig Utilization

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